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Marc Andreessen has proved himself to be one of the foremost entrepreneurs and financiers of his generation and is said to see himself as another J. Pierpont Morgan. Andreessen jumpstarted the growth of the Internet as the technical expert and co-founder of Netscape that was sold to AOL for billions. He has since built his VC firm, named a16z, into one of Silicon Valley’s foremost funds and seeks to become a leader in other areas of finance with $55 billion in assets under management and with tentacles in other areas of finance. Here are 9 lessons from Marc Andreessen:

#1. Focus on emerging trends. Andreessen was a pioneer in the emerging Internet, and Netscape, his landmark venture, kickstarted the Internet. Nearly every entrepreneur from Sam Walton (Walmart) and Dick Schulze (Best Buy) to Joe Martin of Boxycharm and Brian Chesky (Airbnb) jumped on an emerging trend.

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#2. Finance after Strategy Aha, the third Aha! There are 4 Aha’s and the Top 20 VCs, who are in Silicon Valley, mainly finance after Strategy Aha. to get an edge on other VCs, to replace the entrepreneur with a seasoned CEO, and to promote and build the venture for an attractive exit. However, if you are an entrepreneur, wait for Leadership Aha!

#3. Respect your growth engines. Andreessen and Horowitz, his partner in a16z, have a policy to respect entrepreneurs and their time. Their firm’s VCs are fined if they keep entrepreneurs waiting. They recognize that entrepreneurs are crucial to bring ideas to Aha.

#4. Flip fast if valuations are through the roof. Timing is crucial in VC to get a high value exit through a strategic sale to gullible corporations that recognize the potential but not the risks. This might be one reason why nearly 70% – 90% of corporate acquisitions fail.

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#5. Expand in “easy” directions from a strong base. Corporations expand in “easy” directions with proven products into new markets or new products into established markets. While most VC firms have stuck to their VC knitting, a16z is diversifying to money management and investment banking – to combine home runs and base hits for higher returns and synergies.

#6. Keep partners on a smart leash. Not too tight. Not too loose. a16z allows its partners to seek new directions, but also monitors their ventures in order to cut losses. This means allowing the partners to test new ideas with limited capital, investing more if successful and cutting if not.

#7. Learn investing by proving assumptions. Gamblers rely on their instinct. Smart investors do their homework. a16z challenges its partners’ assumptions and requires them to test to minimize the risks. Except for senior partners, who have more leeway.

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#8. No boundaries. Others may shy away from entrepreneurs with a dodgy past, but 16z does not seem to have any such qualms, including financing Flow, the new venture by Adam Neumann of WeWork infamy.

#9. Promote constantly. a16z is no stranger to PR, which helps companies such as Coinbase. Airbnb, Affirm, Instacart, Netscape, and Skype to be relentlessly hyped and allows VCs to exit at sky-high valuations. After they exit, watch out below because the valuations often tank.

MY TAKE: Andreessen and his firm seem to have found the right mix of positioning on emerging trends, testing new directions, and relentlessly promoting for high valuations. But Andreessen is human – after being an early investor in Instagram, his company invested in a competitor and avoided a later round of Instagram funding. The competitor folded. Instagram became a unicorn.

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The above also suggests a piece of advice for the investing public: Be careful about investing when the venture is going through its hype cycle prior to, along with, or immediately after an IPO when the venture, the VCs and the investment bankers are in full promotional mode. Let the hype die down before considering an investment.

Bits BlogHow Andreessen Horowitz Bunted on an Instagram Investment

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MORE FROM FORBES20 VCs Capture 95% Of VC Profits: Implications For Entrepreneurs & Venture EcosystemsBy Dileep Rao
MORE FROM FORBESFrom $375 To The Newest Unicorn In Beauty: How Joe Martin Built Boxycharm.com Without VCBy Dileep Rao

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FortuneInside Andreessen Horowitz’s grand plans to scale its venture capital firm into a behemoth and conquer the globe

Andrew:
This is the BiggerPockets podcast show 767.

Angie:
The management company knows what they’re doing. They are the professionals, they’re the ones with the experience. When you have a client that’s overly involved, case study after case study, the property does not succeed. When you have clients that are hands off and you have a weekly call with them, you send your weekly report, your owner’s report. Those properties time and time again are hugely successful.

Andrew:
Andrew Cushman here with our buddy Matt Faircloth. David Greene has left the recording studio vacant once again, and we thought he might have learned his lesson from the last time, so we are taking over.

Matt:
Glad to be here with you, Andrew. I’m grateful that I get to do the takeover with you. You’ve got an exciting conversation coming up today and people are like, Why are you excited about property management? This is so boring. Let me tell you guys, shame on you for thinking property management’s boring. Property management is, it is what will make or break your profitability on a deal. A good property manager will take a mediocre deal and make it amazing and they’ll take an amazing deal and make it complete crap. And guys, one last thing. If you guys want to hear more about what makes deals profitable, property management and asset management, you guys have to listen to show number 739 where myself, Andrew, and David go deep dive into what asset management is, what it’s not, and how it correlates with property management. So after you listen to this one, check that episode out. Number 739.

Andrew:
Today we’ve got a multifamily market expert with us. We are going to first get into a bit of a market update because things are changing rapidly and we want to try to keep everyone up to date on what we are seeing in real time out there in the markets. Then we’re going to talk about property management and we’re going to talk about a lot of stuff. But a couple things that are real important to watch out for is the key traits that an investor should look for in a third party property management company. What are the top mistakes that new investors make when bringing on third party property management? And we’re also going to hear a story about a tenant who had a vertically integrated farm butcher shop and barbecue that they were running inside their unit. So stay tuned for all of that. Matt, do you got a quick tip for us? You ready?

Matt:
Quick tip. Okay, guys, here is your quick tip of the day. Andrew and I have assembled a phenomenal resource for you guys to use when you’re interviewing property management companies. These are 27, not one, not two, not three, 27 questions you need to be asking a property manager when you’re considering hiring them guys. And this is capital F free, something that Andrew and I put together as a nice gift, a nice thank you. Back to you guys. Go to biggerpockets.com/resources.

Andrew:
Yes, go grab that, make it your own. Add some additional questions and let us know in the comments on YouTube, what you think of it. All right, I’m excited. So let’s go ahead and jump into that market update.

Matt:
So guys, let’s talk about the market, man. Things are changing daily. What do you guys think? Where we at?

Andrew:
Well, it’s interesting as everyone listening knows it has been, I can definitely give some insight, we’ve been pretty active in this last quarter. Deal volume, we’re seeing a slight uptick in what’s available to look at. We’re underwriting more deals than we have been, not getting more offers accepted, but we at least have more properties to look at. There’s a lot of headlines out there. I’ve seen stuff like rent drops six time in the last six months and all that. We’re not seeing that. Our rents are up at all of our properties. Almost every one of our properties had record collections in March. I think it’s really important to differentiate what markets you’re talking about. Remember, real estate’s local, not national.
So yeah, rent’s probably down if you got A class property in San Francisco, but if you’ve got a B class property in a strong growing submarket, it’s probably still doing pretty well. Don’t let headlines scare you off. Lots of properties still doing fantastic. We also just closed an acquisition at the end of March. It was the largest equity raise we’ve ever done. It sold out in a week. So again, there’s lots of talk about, you can’t raise equity these days. And yes, it is harder, but if you have the right deal and the right investors and you put those two together, you still can get a deal done. And then finally, on the flip side of that, we just listed a property for sale and right out the gate we got actually a pretty strong offer with hard money. We’re not going to accept it just yet.
But what we’re finding is properties that require bank or bridge loans are pretty tough to sell right now because those lenders are tightening their sphincters and financing is really tough. But if you’ve got a property that’s stabilized in a good market that qualifies for agency financing, the agencies are still very active and they’re out there putting loans on stabilized properties. So because there’s so little inventory for sale, properties are actually doing quite well. That’s the four things that I would hit on and dispel some of the myths and doom and gloom that’s out there. But Angie, Matt, anything you guys would add or want to comment to flush that out a bit?

Matt:
Interesting stuff, Andrew.But first of all, I can’t help but say it, congrats on the purchase and listing a property for sale, can’t help but high five you on that. I’m also seeing a lot for sale. And unfortunately, if you look at the properties that are for sale that I’ve seen, a lot of them are things that people bought a year ago, two years ago. You’ve probably seen a lot of those where folks have bought something, the seller bought it two years ago and they’re selling it for double what they paid for it, or the brokers that has it on the market for double what they paid for it. It’s a pocket listing, right? Meaning the broker doesn’t even have a signed listing agreement. They’re just going around. The seller said, well, if you can get me this number, I’ll sell.
I’ve seen a bunch of those and I don’t know, I don’t want to go buying somebody else’s problem. And I get leery for buying anything that was owned for less than 18 months to two years. Because the problem with that, that I’ve seen it firsthand, you can’t address real capital improvements. You can’t address real deferred maintenance in that short of an ownership cycle. You need to own a property a little bit longer to deal with all the things that need to get dealt with. And so these are all just properties that have just been polished up a little teeny bit and her back on the market. So that’s what I’ve seen a lot of these days. But I don’t know if it’s really an indication of the market. I just think that a lot of folks are just hanging on waiting.

Andrew:
I’d agree. And those ones aren’t going to trade. Those are the sellers that will end up riding the market down. The market will drop five, 10%, then they’ll drop their price five, 10%. Well, guess what? They’re still behind the eight-ball and they’re going to be chasing it down and holding on forever. So yeah, the property that we bought was long-term ownership, like six years. And the one we’re selling we’ve owned for six years.

Matt:
There you go.

Andrew:
So that actually makes it work. So now Angie, you have a little bit of a different insight because you see the nitty-gritty on the other side of this, on close to what? 25, 26,000 units.

Angie:
Yes, 25,000 units. It’s a little bit different. Our clients or what we’re seeing is our clients are actually not buying anything right now. Number one, prices are still ridiculous. Interest rates are up. And we also have clients that have concerns because they have bridge loans out there and they’re worried that they’re going to lose their properties and they’re going to go into receivership. We’re seeing a whole mixed bag of things. And with regard to the rents, certain markets, you’re absolutely right, Andrew, there are markets, the secondary and tertiary markets that the rents are still going strong. But in the major cities, exactly what you said, you referenced San Francisco and all, because we’re a Georgia-based management company, I’m going to reference Atlanta.
We’re we are starting to see the ramps drop. We’re seeing concessions being offered. And so you are starting to see that weakness in the market on the A and the B. And historically A starts to fall, then the B gets the A residents, and then it’s a vicious cycle and it goes down to the B, the C. There’s some concerns out there, and I think it’s going to be tough. And I think we’re going to see a lot of properties in the latter part of the summer, early fall going to receivership and foreclosure.

Andrew:
And so for those who are listening who aren’t familiar with the receivership, could you just real quickly define that?

Angie:
Yes. If a property’s going into receivership, the finance lender takes it to what we call a special servicer. So there’s a lot of special servicers in the US and so the loan goes to what’s called a special servicer. And then the special servicer actually takes the property owner to court because they’re not paying the mortgage and they take the property owner to court and the court appoints a receiver. So your court appointed receiver, which means bringing in a management company to manage the asset. For the receiver, the receiver’s actually managing for the lender, we manage for the receiver, and it stays in receivership until such time the special servicer decides to sell the asset.

Andrew:
And the special servicer typically puts it up for sale relatively quickly from that? Or is there a lag or?

Angie:
It depends on the condition of the asset. So if it’s a very distressed asset, and so you think about a property where the mortgage isn’t being paid, generally other things aren’t being paid, there’s a lot of deferred maintenance and the water bill may not be being paid. And a lot of times you see these properties end up on the news. It’s like, wait, 200 unit apartment community, the water’s been shut off because there’s no money to pay anything. And so you end up with generally a very distressed asset. So being appointed a receiver, the manager comes in, the management company comes in and turns the property around. The special servicer actually gives you the money, which is phenomenal, to turn the property around, get it in a condition to which it can be sold.
So it depends on the condition of the asset when we get it. They’re not always bad, but generally they are because by the time it goes from default on the loan all the way through the courts to appoint a receiver can be up to a year of distress for the asset.

Andrew:
And it’s funny you mentioned them being on a news, in a decade and a half of being this business I don’t think I’ve ever seen a piece of real estate being in the news for a good reason. That’s almost universally not something that you want to happen to a property you own. And then no investor left behind. Let’s dive in. Just quick definition. What is a special servicer?

Angie:
A special servicer is a company, and I’ll give you a few examples. CWCapital, LNR Partners in Miami who we work a lot with. Rialto Capital, those are special servicers and they literally focus on distressed loans.

Andrew:
So they basically come in and take over regardless of whether or not the owner wants them to?

Angie:
Yes.

Andrew:
And then the final question for those who, there’s a lot of us out there and especially those who have been trying to get into the business the last few years, it has been so tough to get a deal the last few years. Prices are high. There’s tons of competition. You are seeing behind the curtain, right? Because you’re managing thousands and thousands of assets. Matt and I only have a couple thousand. You have a much broader view than we do. I’ve been hearing stories of properties where they can’t make the mortgage payment. And then like you said, they’re not paying vendors, they’re doing capital calls. There’s no more distributions. They’ve got a balloon loan due in six months. For somebody listening, when do you think some of these things are going to become opportunities for a new investor to get in at the bottom of the next cycle?
How much longer can some of these property owners kick the can down the road before they end up in special servicing and then for sale, before they become an opportunity for the next person?

Angie:
Well, our prediction is late summer, early fall, that we’re going to start seeing the process start and that we’ll build from there. Because as you know, Andrew, so many of these people have overpaid for these assets and it just can’t continue. So you get into the vicious cycle that happened in 2008 and nine where you’ve overpaid for this asset, you underwrote it to have these astronomical rents and you can’t obtain the rents because the market’s falling apart, concessions are being offered, and it’s just that vicious downhill cycle. Oops, now we can’t pay the mortgage. Oops, now we can’t pay this. I think we’re going to see the beginning of it, especially on these balloon loans, again, late summer, early fall is our prediction.

Andrew:
All right, so late summer, early fall. And then final question, and I’m really interested to hear your thoughts on this. Some folks that I talk to and that I listen to are saying, hey, this is just going to be a slice of the multifamily market. Others are like, this is going to take the whole market down like 2008. I have my thoughts, but I’d like to hear what you think in terms of, is this going to be more like select opportunities for those who are looking to buy or is this going to be just a widespread distress it was in the great financial crisis?

Angie:
No, in my opinion it’s not going to be, because I think there’s so many property owners out there that have good solid loans at a reasonable interest rate. They’re cash flowing now. So they can take a little bit of rent drop and some tough times and tighten the belt, let’s say. So in my opinion, I don’t think it’s going to be mass destruction. I think it’s going to be, again, the people that have overpaid for the real estate that were not smart purchasers, that had to get the money out there. And those are the ones that are going to suffer, in my opinion.

Andrew:
Okay. All right, good. Well, that’s hopefully some good relevant information for everybody who’s out there looking for deals and maybe even have some of your own properties. Matt, do you have anything to add before we transition on?

Matt:
I agree that a lot of properties are going to maybe have issues, but I’m not a doomsday foreseer either. I think a lot of folks are going to find a way out or find a way to make it work. I don’t think there’s going to be blood in the streets by any stretch. I do think there’ll be plenty of deals to be had, maybe more. And I think that those that are going to win in this game or those that got into this game to play the long game. Those that got in that wanted to flip an apartment building like a hot potato and get in, get out in a year, two years as they see people on social media doing, are going to maybe have to either change their plan or they might end up losing a property. Who knows?
But I think that those that are getting into the game or expanding in a multifamily, Andrew’s a case in point, Andrew just did a deal, just closed a property or just put a property under contract and closed it just recently. It can be done. Good deals still can be had in that. I think that those that are sitting on their hands and waiting for the sky to fall are going to be sitting on their hands for a while. You might as well just get out there and try and find opportunities. Just be scrutinous and bid on deals that with an understanding that you want to make cash flow and that appreciation, because appreciation might not be a thing for a while. I think cash flow is going to be the king for a very long time in multifamily.

Angie:
I keep telling clients too, be careful in your underwriting because the market literally with inflation and everything else, the breaks have to go on. You just cannot continue at this pace. And there’s going to be a time where people are going to say, I can’t afford this. And you can’t keep affording these massive price increases. So underwriting to me, even though there might be some good deals out there, you can’t underwrite and expect 30, 40% rent increases. The market cannot bear it. And that’s what we continually advise clients of, do not over project your rents because it’s not going to happen. And we’ve seen it. People are just like, I’ve had enough. No. So you have to be very, very careful and we continue to advise clients of the same. If you have to underwrite these massive rent increases, don’t buy the deal because it will fail.

Matt:
So before you move on from our market analysis, I want to just let everybody know that the crystal balls owned by Matt, Andrew, and Angie are in the shop. We cannot seem to get them out of the shop. So make your own market decisions based on your own market data. You make your own offers at your own risk. So that is our Matt, Andrew, and Angie disclaimer for the day. But I hope that you found this market conversation informative. Moving on, Angie, you are someone that Andrew and I both think a lot of them have interacted with in the industry, but for those that have not heard of you, don’t know you in that, could you give us a brief intro and tell us who Angie Smith is and we’ll jump into an awesome conversation about property management and multifamily.

Angie:
Okay. Yeah, great. My business partner, Cindy Batey and I started Strategic Management Partners, or SMP, as everyone knows us, in 2010. We literally started the company with zero assets. And we worked for companies that were going bankrupt or were distressed. And Cindy and I looked at each other and said, what are we going to do? And we either going to go to work for someone else or we’re going to start our own company. And so we started SMP in 2010, 0 units and literally we called it dialing for dollars. Cindy was calling attorneys and brokers that she knew from her past. I was actually calling special servicers. So it leads into this. And it was when the market was falling apart. And finally a gentleman in his name, and I have to say it because I think the world of this man, his name is Hector Gomez, and he said, “Angie, I give you a chance.”

Matt:
Nice.

Angie:
And I was like, yes. We finally got a deal from a special servicer and it worked out beautifully. And he gave us the most distressed asset you can even imagined giving someone. And he gave us his asset. We turned it around and we became known at in LNR as the Georgia girls. And the Georgia girls, we got to give them more, we got to give them more. And literally LNR gave us 18 properties in one day throughout the state of Georgia though we had to go take over. And so between brokers, attorneys believing in us and Hector Gomez at LNR, that’s really how SMP got their start. And we did such a good job on those distressed assets and it just built our reputation with the brokers because they saw these assets in distress, couldn’t believe that we had the ability to turn them around and they were able to sell them at great prices for the special servicer. And there you go. And that’s how SMP really started.

Andrew:
We’re going to take a slight diversion into the juicy stuff here. So what you’re telling everybody is you started off your company managing the most unmanageable assets out there, during one of the most unmanageable times in multifamily in recent history. So tell us, give us one of your most interesting property management stories that you’ve encountered over the life of SMP.

Angie:
Well, it’s a Hector Gomez LNR story. There you go. And it wasn’t the property that he gave us our chances on. It was another one. And it was a multicultural property. And when we took over, there would be, and I’m not exaggerating, I’m not kidding, there would be goats on patios or chickens. And then we started walking the units and there were holes in the carpet in the living rooms and we’re all going, what? And they were actually taking care of the animals.

Matt:
There we go.

Angie:
They were taking care of the animals.

Matt:
Well, they weren’t vegans is what you’re saying.

Angie:
They were not vegan at all. And then they would cook the said animals in the floor in the apartment because they did not know how to use appliances, American appliances, because you have to think a lot of these people came from places where they did not have modern equipment, electricity, anything. So we had to deal with that. And we actually had to post signs, this property had a retention pond that had ducks and geese, and we actually had to post a sign, habitat not for human consumption because they would take the creatures out of the retention pond and have them for dinner as well.

Matt:
Now Angie, were they paying pet rent for the goats and chickens?

Angie:
Do you know Matt, we actually kidded about that. It became a joke even with our asset manager, are you charging pet rent? We can make a lot of money here.

Matt:
That’s a revenue stream, man.

Angie:
Revenue stream. But no, we had to stop the practices. There you go.

Matt:
Oh man. Different strokes, right?

Angie:
It was a total educational situation too, that we had to help people truly learn how to cook and use modern appliances. It was a wild time, it was fun. That’s probably my wildest story.

Matt:
There you go. Every landlord’s got stories that at the cocktail party, they’re the one that you got to stop the music and everybody huddles around the landlord, you hear them tell some crazy landlord stories. So thank you for sharing that.

Angie:
Exactly.

Matt:
Here’s an interesting thing, right? Because some folks listen to this podcast that maybe are just getting into the real estate game or some folks that are listening that may be self-manage or whatever it is. Property management, believe it or not, Angie, some folks don’t find it to be that interesting. And some folks might even say, I don’t even need to talk about property management or even listen to that podcast episode because it’s not that important. Right? What would you say, to say that why is a third party management using a separate PM company, aside from managing in-house, why is it, I’m throwing you a softball here because I think Andrew and I both agree it’s imperative, but why is it important for a real estate investor, why can’t they just buy the property and let the winds of the market take the property where it’s going to go?

Angie:
Good question. And a lot of people, you’re right, Matt, do not understand it, but it’s the boots on the ground day in and day out that make it happen. You have to deal with the resident, you have to lease the apartment, you have to collect the rent, and you have to understand the market you’re in. So let’s just say someone from San Francisco, California buys a property in Savannah, Georgia. What does that person from San Francisco know about Savannah? 99% of the time little to nothing. You need to hire someone that is market knowledgeable, that knows what they’re doing, knows the laws of the city and state in which they’re operating, to be successful and is hard to manage a property from thousands of miles away. You need a professional management company on the ground, running your asset.

Andrew:
Let’s step back a little bit. How exactly do you define, what is third party property management?

Angie:
And there’s really, I’ll say three different types of management companies. There’s a third party management company, which is 100% fee managed. We SMP for example owns no real estate. And then there’s an owner manager where they may own some real estate, but also they’re a management company. Then you strictly have the owner that manages, and I know that just sounds crazy, but you can have an owner manage a real estate company that they own and manage third party and then the owner that has their own management company and manages. So for someone that’s out there looking for a management company, and my career prior to SMP was an owner manager management company, and a lot of the clients would say, hey Angie, how do I know Mr. Owner of the management company?
He’s getting all the attention, he’s getting all the best employees, he’s getting all of this. So it created a lot of friction, so not to say that they’re not good management companies or they won’t do a good job for you, but to have a third party 100% management company is appealing to a lot of people.

Matt:
I want to highlight something, because you don’t only work for individuals like myself and Andrew that are either syndicators or larger corporations that are hedge funds, whatever, that are owning multifamily. There’s also a concept called receivership. And you mentioned it when we were talking about the markets. You mentioned it here. I’m realizing that to some folks we might just be throwing around real estate slang, right? What is receivership? Let’s define that term and talk about how it’s different than working for a direct operator like myself or Andrew.

Angie:
Right. Well, as a special servicer or being a receiver, actually if you’re appointed receiver, you’re appointed by the courts in the county in which that property’s located. And the court literally appoints you receiver and you report to the court. So you work with the special servicer, they’re the ones that fund you money to operate the asset, but it’s the court you actually report to.

Matt:
Is this like a bank owned property? Because a lot of people in other lanes of real estate might call that a foreclosure where the property’s now owned by the bank. But a receivership arrangement could be, correct me if I’m wrong, Angie, where it’s still owned by the owner, but the bank has taken over the responsibility measures and turned in, you turned it over to your company to act in their best interest, if you will, even though they’re not the owner.

Angie:
Correct. And the foreclosure. So you have receiverships and foreclosures. So if a property goes into foreclosure, the lender has taken it back and then they hire a management company to operate it. And under the same really pretty much premise as you do a receivership. So they fund, you operate until such time the lender wants to sell the asset. So in a receivership, technically, yes, Matt, the owner still owns the property, but the lender goes in, gives it to a special servicer who takes it to court to appoint a receiver because they’re in default of the loan. And a lot of times a receivership property keen or generally does go into foreclosure. So it gets the owner out of it. So it will go into foreclosure. But there are times, and we had it during the years that we managed so many of these, that it stayed in receivership the entire time.

Matt:
Have you ever seen a situation where a property in receivership ended up getting out of receivership and going back to the owner?

Angie:
Never.

Matt:
Okay.

Angie:
Never.

Andrew:
I’ve heard stories of owners trying that, but they generally get found out, and that’s not allowed. One of the key things for investors, especially those who are looking to move to another market or get in for the first time, is picking a property management company. I live in California, I’m going to invest in Georgia. There’s all these property management companies. How do I figure out which one is the right one for me and my business and how I operate it? So could you, Angie, explain a little bit, how does someone go about picking a property management company? And then in that, actually tell us a little bit more about SMP, how many units do you guys have? Who’s a good fit for you? Who isn’t? And maybe use SMP as an example of how someone would go about that selection process when they are building their third party property management team?

Angie:
It’s a good thing for a property owner to interview more than one management company because a lot of times, and I’m going to start this and this will throughout our entire conversation today, this will be the key. It’s a people business. It’s all about the people, it’s about the property owners, it’s about the property management company, it’s about the vendors, it’s about the residents. So everything we do in property management is a people business. And so a lot of times it’s personalities. How is the personality between the owner and the property manager? Then, does the property management company have the expertise? So do they have the expertise in the asset class of what’s being purchased? Do they have the market ability? Do they understand the market and do they have the right accounting software?
Are they agreeable? Okay, I want my property on accrual. Oh no, I want my property on a cash. Is the management company accommodating to that? So really it’s a relationship. And that is why Cindy and I named our company’s Strategic Management Partners. We wanted to strategically manage with our clients. And that’s how we came up with the name, because we wanted it to be a partnership. Here’s another thing that’s interesting, and again, you asked me to use SMP, so I will. So when Cindy and I started the business and we started meeting with potential clients and doing our dog and pony show, we literally had to tell people we are not going to be a buy the policy 100% cookie cutter company. So property, like Andrew has two properties in the same city. I’ll use that for example. We don’t operate those two properties exactly the same. I don’t care if they’re a mile down the road from each other, they’re different assets with different residents, different everything.
I’m not going to run property A exactly the way I’m going to run property B. Of course you have generalities, you collect the rent the same, you try to get everybody to pay their rent online, et cetera, et cetera. But the marketing of the asset or what you do can be totally different. And I think that is also besides us getting started in the receivership business and proving to the world that we could manage stuff that nobody thought could be managed. It was our commitment to our client not to run everything exactly the same because no two assets are exactly the same.

Andrew:
One quick thing to ask before we move on to another topic. Where is SMP now? Because when we met, I think you guys were at about 3000 units. So where are you now and where does that put SMP on the scale or spectrum of management companies that investors have to choose from?

Angie:
Right. Dang Andrew, we’ve known each other way too long. If we started at 3000 units, we currently, we run between 24 and 26,000 units. Again, being a fee management company solely, clients buy, clients sell. So our numbers from month to month literally are up and down. But we generally run between the 24 and 26,000 unit range is where we’ve leveled out at. And there’s larger management companies, there’s smaller management companies. I just think we fit in a good, I’ll say a good niche. And we do not operate in every state. So if a client asks us to go to Kentucky, for example, the answer would be no. Number one, we would be doing a major disservice to that client because we don’t know flip about Kentucky besides the names of the city and they race horses there. So it is just not our forte. Or to go to Arkansas or Andrew, California.

Matt:
I wouldn’t go to California either.

Angie:
I wouldn’t go.

Matt:
Not for investments, no.

Angie:
So you don’t want to go where you’re going to do a disservice to your clients. And if a client is buying a bad deal and we don’t agree with it, we will also tell our clients, no, this is not for SMP. And we have probably lost more business. We could probably be at 50 or 60,000 units now. We’re not going to do it if it’s not the right fit. So it has to be, again, a mutual partnership and agreement because we don’t want to set our client up to fail and we don’t want fail for our client. Are we perfect and have we failed? Absolutely. Will we do it in the future? Absolutely. It’s part of life. Sometimes it works and sometimes it doesn’t and it’s okay. And that’s why we have a 30-day out in our management agreement.
If you’re not happy with us or we’re not happy with you, let’s part friends. Life’s too short. And again, this business is 100% about people and relationships.

Matt:
Absolutely. And going further on that, let’s talk about people, right? Because there’s two different people, there’s the owner and the property manager. And let’s discuss that relationship for a little bit in that. What is the most misunderstood part of the owner, PM relationship, that you see over and over and over again and you wish, you’re talking to lots and lots of real estate owners right now, so this is your chance to preach from the pulpit and tell all these owners, what is a big misunderstanding that owners have, either about something a PM should be doing, that they think owners should be doing that they’re not? Or just a common misconception that you think owners have between the PM and owner relationship?

Angie:
Well, that’s a tough question, Matt, but I’ll answer it this way. The management company knows what they’re doing. They are the professionals, they’re the ones with the experience. So when an owner, especially new ones are too involved in the day-to-day operations and want to say, oh my gosh, we just had a unit come vacant, raise the rent $250. Well Mr. Client, no, you’re going to price it out of the market and it’s unreasonable to expect that rent. Do it anyway. So when you have a client that’s overly involved, the chances of success of the management company, and this just is not SMP, it’s every management company in the United States, you’ve hired them for a reason, let them do their job.
And for those clients that are overly engaged, case study after case study, the property does not succeed. When you have clients that are hands off and you have a weekly call with them, you send your weekly report, your owner’s report, you’re engaged in good conversation with them. Those properties time and time again, are hugely successful.

Andrew:
I’m going to play devil advocate for a second here, Angie. I own the property, I care about it more than anybody else, therefore I’m going to do the best job managing it.

Matt:
It’s my money.

Andrew:
It’s my money, it’s my property. I’ve got my own thoughts on that. But what would you just say to an investor who says they want to self-manage because of that reason?

Angie:
And we’re going to keep this show PG, I was pre-warned about that. So we are going to keep it PG. Well, Mr. Client, you don’t flip and know everything and I’m sorry. We try to professionally tell our clients that, please, we have the market expertise. We understand. We do this day in, day out. We have done this for a living. You haven’t. Please let us do it. And sometimes they do, sometimes they don’t. But a good management company, and Cindy and I tell our clients this all the time, Cindy and I, we’re going to go to past lives. We had major ownership in real estate. We understand what it’s like to own a property and want that property to succeed. We instill that in our executive team.
When we tell them time and time again, you treat this asset like it’s your own. So Andrew and Matt, there you go. We instill in our people, pretend like this is your asset, that you own it. And that’s what we try to always give our people.

Matt:
Going off of that, right? There is a line though of things the owners should be doing and maybe they expect a PM company to do. So what are some common things that an owner really ought to be doing themselves and they maybe expect, an untrained owner would expect their PM company to do, but it’s really the owner’s task?

Angie:
I’ll just give a couple of examples, because there’s many. But like tax appeals, a management company is not a wizard in tax appeals. We don’t do that. That’s not our forte. So there’s tax appeal companies out there. Mr. Owner we’ll get you the tax appeal company, but your manager is not going to go file a tax bill for you. I need to get a refi done. Will you work on this? No, it’s not our job to do your refinance. It’s your job to do your refinance. It’s our job to manage the property. So those are just a couple quick examples of stuff that sometimes we get asked and they’re like, well, why can’t you just do the appeal? Tax appeal companies they get a fee for doing this. And the client says, oh no, you can just do it. No, we can’t.

Matt:
I can’t believe you’ve had owners ask you to handle your refinance. I’ve also heard of owners asking their PM company now to handle their investor distributions for us. Like, hey, can you just pay my investors direct and send them there quarterly, just send it to them direct from the company. Right?

Angie:
Happens all the time.

Matt:
The reason why you can’t do that, there’s a fiduciary duty there. That’s not an end of the stick that you want to pick up in dealing direct with investors. And that’s probably something that ought to get handled by this syndicator or by the operator themselves and investor relations and everything. Yeah. Great. Thank you. Well, what are some things that keep you up at night, about just things that go wrong on these properties and things like that where you’ve got, just what keeps you up at night as a PM, as a good property manager that really cares? And I can tell you do. So as a PM that really cares, what is something that just really concerns you on a day-to-day basis as a property manager?

Angie:
Number one. And it’s number one, number two, number three, crime and lawsuits. It’s very simple. That is the hardest thing that any management company will ever deal with, is crime and lawsuits. It’s no fun. You can have a drowning, you can have a shooting, you can have a kid fall out of a tree and you’re getting sued. Somebody falls off of a ladder. The legal aspect of this. And everybody is so litigious today, so we can go into insurance from here and I can talk to you for hours about the insurance and how hard it is to get insurance now. But the litigious society that we live in today makes it very hard to be a property manager. And it’s actually scary. And then yes, it can’t keep us up at night, especially if we have one of those situations happen.

Matt:
Well, let’s go there, because a lot of things you talked about, crime and lawsuits are driving up the cost of insurance for owners. It’s not just because we’re getting more hurricanes or whatever, because not every area is getting that. The cost of insurance is going up drastically on multifamily. Why is that? You already comment on why that is. What is something that you recommend owners can do? Are there ways that we can navigate insurance costs and that multifamily owners can just be prepared for with regards to cost of insurance?

Angie:
No. And there’s really no simple answer, Matt. I just can’t say, wave this magic wand or do this or do that. Because if you go to an insurance broker and they take it out to market and you don’t like those quotes and you go to another insurance broker, well, the next insurance broker’s going to be blocked out of the market. So they can’t go get those quotes because they’re already blocked out of the market for that piece of real estate. So you literally have to trust in your broker to shop every aspect to get the best insurance possible. But is there just a simple snap your finger solution to insurance these days? No. And again, we’re primarily based in Georgia, getting insurance in the state of Georgia, especially in Atlanta, I’ll leave it like that, Metro Atlanta.
It’s almost impossible because the laws in Georgia have changed and so many high awards have been awarded to people from juries that the insurance company’s just, life’s too short, we’re out of Georgia. And so owners are having a very difficult time in Georgia getting insurance.

Matt:
Trouble all around. Good insight. It is what it is. A lot of folks I talk to either talk about, they look at property management as believe it, and you can scream, don’t do it right now if you want, they talk about either self-managing or even gasp, starting their own property management company and managing on behalf of other people. Drinking the Kool-Aid that you drank many years ago and doing it themselves as a revenue stream, as a business to own. What would you say to folks that are considering getting into the business as you and Cindy did many years ago and starting their own PM company?

Angie:
The difference is, Cindy and I grew up in this industry. So I started out as the leasing consultant, worked my way up to owner of a management company. It didn’t happen overnight. We had the big hits and the fall down and hurt your knee along the way. So we had the experience of learning the industry versus an owner that they just bought their first property and they think they’re going to go in and manage it. They don’t have a clue. They don’t know, number one, you need a software program. Well, some people go in and try to use QuickBooks when they buy their first property. And how to hire people. What do you hire for? Where do you get the vendors from? And that is the experience that comes from a management company to know that.
Now, there are owners out there that have started their own management companies quite successfully, but it’s understanding the business and it didn’t happen overnight either. You don’t buy your first property and then start a management company. It generally just doesn’t work.

Andrew:
I would certainly agree with that. And then also, so there’s a lot of people listening who are like, okay, that’s great, but I still need to pick a management company. So what would you say are some of the most important, if you were to pick the top three most important questions that somebody interviewing property management companies should ask, what would those three questions be? And then for your bonus question, what is the question that everybody asks that really isn’t that important, even though they think it is?

Angie:
What’s my astrological sign, I guess? So important things to ask. Again, I have to go back. Do you understand, know the market and can you operate in that market? Because if you hire a management company that doesn’t know the market, they’re going to be starting behind the curveball. Can it be done? Yes, it can be done. But if they don’t know, again, let’s go to Lexington, Kentucky where SMP does not operate, you would be making a huge mistake. So they need to know, do you know the market in which we’re purchasing our asset? What kind of software do you use? Do you have the bandwidth to take on our property? Is another good question.

Matt:
That’s a great question. And I bet you nobody asks that.

Angie:
Very rarely. Every once in a while, but very rarely does that get asked. And what kind of billbacks or hidden fees are there? A lot of people don’t ask that. And Cindy and I, when we started SMP, again, we came from very large companies in our past lives that some of them had or they had billbacks. And when the client saw some of it, they’re like screaming. So Cindy and I are full disclosure, we tell you exactly what you pay for with SMP and you see every check that’s written, everything, there’s no hidden agenda. And when Cindy and I started, because I did come from the fee side with an owner portion, and she was totally from a company that was owner managed, so she didn’t understand what I was saying. But I was like, no, billbacks, full disclosure to our clients and we live with that integrity every day.

Matt:
Can you just real quick, what is a billback? Just to help educate here. What is a billback?

Angie:
A billback could be like if there’s a marketing department or a portion of the accounting fees would be billed back to the client, and that is not disclosed in the management agreement.

Matt:
Like charges up and above and beyond the PM fee.

Angie:
Yeah. Or portion of the regional manager or whatever that is being charged to the client, unbeknownst to them.

Andrew:
I want to highlight two of the things you said, Angie, that in my experience and observation are two of the biggest reasons that owner and third party management relationships fail. And that is, number one, you said make sure you hire a management company that knows the market. That right there is absolutely key, because unfortunately there’s two mistakes there. One, an owner hired a property management company that didn’t know the market. The second mistake was the property management company agreed to take the job. They shouldn’t have done that. And then that leads to failure because they don’t know the market and that owner is not really going to get better service than if they did it themselves because the property management company doesn’t know that market either. I think that that’s real important for everybody to make note of.
The second one is bandwidth. A lot of companies, not just in real estate, but across the board, are growth at any and all expense. And especially in property management that’s a huge mistake, because if you’ve got a regional that’s already managing 27 properties and yours is going to be the 28th, you’re probably not going to get that much good oversight and things just aren’t going to work well. So for those listening, those are two absolute key questions. Is does the property management company you’re talking to truly know the market, have experience in the market? And if they do, ask them if they can help you underwrite and look at deals, right? Because like Angie mentioned, she has said to the clients, no, we’re not going to take that deal. Well, if you’re talking to a property management company and they’re willing to take anything you’re throwing at them, that’s a red flag, right? That’s growth at all costs.

Angie:
Number one red flag probably.

Andrew:
You don’t want that. And then also, yeah, do they have the bandwidth? Do they have the people in place? Do they have the systems? Do they have the capability to hire and bring on and attract new staff? Does a property manager who’s going to come run your property want to work for that company? So again, Angie brought up two really, really good things. Make sure they know the market, make sure they have the bandwidth. And then also for those who missed the previous episode we did on property management, we did provide everybody a list of 27 questions to ask. So if you missed that last time around, there’ll be a link in the show notes, go get that, and that will definitely help you out. Matt.

Matt:
Great, great, great stuff. Andrew and Angie, this has been a phenomenal conversation. Angie, thank you for coming on, on behalf of everybody, for coming on and joining us.

Angie:
It’s been fun.

Matt:
Always fun. So real quick, for those that want to hear more about you or SMP or get connected in one way or another, how would folks do that?

Angie:
Go to our website at www.smpmgt and you can find us.

Matt:
Smpmgt. Angie, thank you. Thank you so much. And congrats on the growth and success of SMP. Looking forward to talking to you again soon.

Angie:
Yep. Sounds good. It’s been fun, guys. Thanks.

Andrew:
All right, take care. Well, that was our interview conversation with Angie Smith on property management. We only got to a fraction of the stuff we would’ve liked to talk about, but this isn’t a six-hour podcast. So for the stuff we did talk about, Matt, what would you pick out as one of your top highlights or most important things that we talked about?

Matt:
First of all, phenomenal interview. Angie is an industry expert. She’s been doing this for a very long time and manages thousands and thousands, thousands of units. So it’s such a great conversation to have with someone that’s got that much seasoning and industry experience. A few highlights for me is towards the end where you had talked about asking a property manager to underwrite deals for you. And I don’t think enough people realize that a property manager can give you, not just, this is the way we would run the property, but a really good or even great property manager is going to be able to look at your financials and validate them and say, well, rents in this market should be X. You have them as Y, or we think we can manage for a lighter expense load or probably more likely a heavier expense load.
They can give you guidance on payroll for folks you’re going to have to hire. A good way to know if a property manager really has their finger on the pulse or not is their ability to give you a good financial analysis for deals. And so I think that asking a PM for their underwriting, their performer is what they’re going to call it, for your property, is I think really, really paramount. And I’m glad you brought that up during the interviewing. That was a good reminder for me as well.

Andrew:
One of the things that she said that I thought was really important to highlight, is that one of the biggest new investor mistakes is picking out the perfect property management company saying, all right, hiring them, putting them on the property and then micromanaging them to death. Just diving into the little details of, well, this unit I want to rent for this, and this unit should be this. And is the lady in 6A, has she paid her pet rent? Step back a little bit and let the property management company handle the day-to-day details. That is what they are there for. And if you hired the right company, they’re going to be better at that than you are.
Now, that doesn’t mean you hand the property over to them and say, all right, I’ll talk to you in a month when you send me the report. You still want to be involved. You still want to be given the big picture vision and direction for the property, but let them do their job, don’t micromanage. And you know what? If you let them do their job and they don’t, well, that’s a different conversation and you can go find another property management company. But if you go third party, let them do the job. So that’s definitely one of the things I would highlight. Matt, for those who are maybe just new to BiggerPockets and somehow have missed you, how do people find you?

Matt:
Folks can get ahold of me real easy, Andrew, just by going to our company website, that is derosagroup.com. Derosagroup.com. They can hear all kinds of cool stuff we’re up to right there at that website.

Andrew:
I’m Andrew Cushman. You can just google my name or find me at Vantage Point Acquisitions, vpacq.com. And there’s a handful of ways to connect with me there. And of course, I’m a BiggerPockets pro member, so make sure you connect with me first on BiggerPockets. So this is Andrew Cushman for Matt, Captain America, Faircloth, signing off.

The social media landscape is in a constant state of flux, with new platforms and trends coming and going all the time—with recent uncertainty surrounding potential TikTok bans in several countries leaving businesses wondering how to best maintain their social media presence. Despite these challenges, businesses must stay adaptable and learn to navigate these changes to succeed in their social media marketing efforts.

To help you ensure success in an ever-changing social media landscape, members of Young Entrepreneur Council share their tried-and-true social media marketing tips for businesses.

1. Strengthen The Organic Aspects

Spend time building the organic parts of your business. From killer SEO to just good regular content, having a strong wireframe is going to matter when popular social platforms inevitably change. If your SEO is strong, your audience will be able to find your product—whether it’s on Instagram or TikTok or whatever the next platform is—even as you figure out the algorithms. – Kaitleen Shee, GROW

2. Have A Direct Line To Your Customers

If your entire brand is built on the back of any one platform—social or otherwise—you likely don’t have a real brand or business. We always ask ourselves, “If Instagram, YouTube, Facebook or the like were to disappear tomorrow, would people still know we exist?” If the answer is no, then focus on building first-party customer data, such as email and SMS. Having direct lines of communication with your customers is key. – Jeff Cayley, Worldwide Cyclery

3. Develop A Core Strategy

Have a core strategy that will keep your online presence established and active, even as trends and restrictions come and go. Keep using platforms and content styles that work for you. Occasionally, shake things up with your audience with offbeat viral challenges, collaborations or contests to raise brand, product or cause awareness and engagement. Influencers and celebrities can help with such tactics. – Bryce Welker, Big 4 Accounting Firms

4. Establish A Consistent Brand Identity

Building a strong brand presence that transcends individual social media platforms can provide stability in a changing landscape. By establishing a consistent brand identity, businesses can create a loyal following that remains engaged regardless of the platform. This includes developing a unique brand voice and delivering consistent messaging across all social media platforms. – Candice Georgiadis, Digital Day

5. Diversify Your Presence

Similar to investing, diversification is key. Each business should be on multiple social media platforms, not just to capture the differences in audience demographics, but also to hedge their bets on any one platform. While Instagram and TikTok dominate in reels, those can also go on Facebook. While Facebook performs well with written updates, those can also be amplified on Twitter. – Joel Mathew, Fortress Consulting

6. Create High-Quality Content

Focus on creating high-quality content that resonates with your target audience, regardless of the platform. By prioritizing content quality, businesses can adapt to changing social media trends. Authentic and engaging content that connects with the audience will continue to drive engagement regardless of the platforms or trends that may come and go in the ever-evolving social media landscape. – Abhijeet Kaldate, Astra WordPress Theme

7. Build A Community

Social media isn’t simply about promoting your business—it’s also about building a community. By focusing on building a community, you can have a more engaged audience who is truly interested in your business. It’s easier to achieve success on social media if you focus on building a community rather than using it merely as a marketing platform. – Thomas Griffin, OptinMonster

8. Stay Flexible And Adaptable

To ensure success, businesses should focus on the larger strategy and stay adaptable and flexible in their approach as they anticipate the landscape changing. Work toward building a strong brand presence across diversified channels and keep up to date with the latest trends and platforms. Continually monitor your analytics and keep an eye on customer feedback to use as your North Star. – Kevin Getch, Webfor

9. Prioritize Creativity

Many brands stick to an evergreen format for their marketing assets. While that may work for their primary promotional channels, they need to have an edge and an ability to pivot as social platforms and consumption habits evolve. By prioritizing creativity, companies free up resources to constantly think about new ways to engage audiences and produce exceptional content. – Firas Kittaneh, Amerisleep Mattress

10. Focus On Your Audience

Before launching any sort of presence on social media channels, you as a business should clearly understand your personas and what social channels they are using. When you provide relevant content to your personas on the channels they love, there’s no need to chase new social media trends and hypes. – Anna Anisin, DataScience.Salon

The financial press is abuzz again about the debt ceiling deadline and the risks of another government shutdown and perhaps a catastrophic default on U.S. debt if an agreement cannot be reached. The ceiling (currently sitting at $31.4 trillion) is set to be hit on June 1.

 The Washington Post is particularly apoplectic,

“Federal workers furloughed. Social Security checks for seniors on hold. Soaring mortgage rates. A global financial system sent reeling… 

“Leaders from Congress and the White House are trying to forge an agreement to lift the federal debt ceiling, with only a few weeks before the Treasury Department may no longer be able to avert an unprecedented U.S. default. If they fail, and the government can’t meet its payment obligations, economists and financial experts predict chaos.

“’It would be a lethal combination,’ said Mark Zandi, chief economist at Moody’s. ‘You can see how this thing could really metastasize and take down the entire financial system, which would ultimately take out the economy.’”

Well, that sounds rather bad. So, is this something real estate investors should be concerned about, and if so, how should one prepare?

Let’s first start with a quick overview of what’s going on and how such “fiscal cliffs” have gone in the past. 

A Recent History of Debt Ceiling Debates

The debt ceiling is supposed to set a cap on the total amount of money the United States federal government is authorized to borrow. Over recent years, this “ceiling” has, for the most part, been something of a joke. 

As the website for the U.S. Treasury Department notes, “Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit.”

I’m not sure what you call something that has been raised more than once a year for over half a century, but a “ceiling” doesn’t seem like quite the right word for it. 

Every once in a while, however, negotiations break down, and the clock strikes zero before an agreement to either raise the debt ceiling or lower spending (or a mix of the two) is reached. In such cases, a “government shutdown” ensues. Although, it should be noted that such shutdowns are only partial and usually involve furloughing government employees and suspending entitlement payments and the like.

There have been 10 government shutdowns since 1980, although the four that took place in the 80s all lasted under a day (two for only about four hours). The longest that occurred before the turn of the century was in 1995 and 1996 and lasted 21 days. Only some agencies were affected, and about 284,000 federal employees were furloughed. (This took place shortly after 800,000 were furloughed in a five-day shutdown a month earlier.)

Since the Great Recession and subsequent ballooning of the federal debt, political fights over the debt ceiling have intensified. Since then, there have been two nasty debt ceiling fights that resulted in shutdowns. The nastiest one was probably in 2013, which led to a 16-day shutdown that affected all agencies and led to furloughing 800,000 federal employees. 

A bipartisan “super committee” was supposed to find $1.5 trillion in cuts over the next 10 years but failed to do so. Thus, we defaulted to an across-the-board (excluding entitlements) budget sequestration that basically no one was happy with. 

The cuts lowered spending by about $1.1 trillion over the next eight years below what they would have otherwise been. (Although some of that sequester was subsequently removed).

In January 2018, there was the longest shutdown on record—35 days—that was predominantly held up over disagreements about a proposed border wall. The cost to the government was estimated at $5 billion.

That’s not chump change, and there were plenty of disruptions from these shutdowns. For example, air travel was strained, national parks were closed, and a bunch of other problems and inconveniences occurred. But there were no major effects. And it almost went without notice to real estate investors as prices showed no effect from any of the shutdowns nor the sequestration.

If budget deficits were rustling some feathers back in 2013, then said rustling has likely increased several times over as the U.S. budget deficit passed $1.1 trillion for just the first half of fiscal year 2023. And this is after the brunt of the Covid-19 pandemic is no longer there to justify such spending.

U.S. Deficit Tracker – Bipartisan Policy Center

Of course, just because the budget is out of whack doesn’t make it obvious how to address such an imbalance. What gets cut? How much? Should taxes be raised? Which ones and by what amount? Obviously, there’s a lot to debate.

At issue here are a variety of issues, including clawing back unspent Covid-19 money (about $30 billion), future budget caps, regulations on energy development, and whether to increase work requirements for those receiving food stamps, Medicaid and/or TANF (Temporary Assistance for Needy Families). In other words, there are a lot of things on the table to discuss.

With so much on the table, it could be difficult to work out a deal. Thus, the deadline might get missed, which is what all the fuss is about. If the deadline is missed, the Treasury would keep making payments despite a shutdown until it runs out of money. If it did run out without some sort of resolution, then the U.S. federal government would default on its debt for the first time in its history (or at least officially, some argue it has effectively defaulted in the past). 

And while a shutdown wouldn’t be particularly bad, a default would be catastrophic.

Should We Worry About a Potential Default?

The last article I wrote was on Stoicism and the importance of not letting things you cannot control affect your well-being. And presuming you aren’t a member of Congress, this is definitely one of those things you cannot control.

But further, the odds of an outright default are extremely negligible. I don’t have a lot of faith in politicians, but the sheer insanity of failing to pay our debt payments when the money is available to do so would be incomprehensible.

It needs to be remembered that this is not an either/or issue. The government will not either come to an agreement or fail to. There are plenty of makeshift and temporary measures that can be (rather easily) taken to avoid a default, even if they don’t avoid a shutdown. This would include passing a temporary extension on the debt ceiling deadline, something that has been done before.

If a default were to happen, it would cause an array of very serious problems for real estate investors. There would be a run on U.S. banks, and credit would dry up. So, getting a bank loan would be close to impossible. Yahoo! predicts mortgage payments would go up a cool 22%! Lines of credit would probably be called, so investors would lose access to those. Thereby, real estate prices would likely plunge. The economy would plunge into a recession, and many tenants would lose their jobs, causing delinquency to spike. Contractors and vendors would go out of business, making it difficult to find people to do work even if you had the money to pay.  

As far as how to prepare, well, if you haven’t already built your underground bunker and stocked a year’s supply of food, there’s not a lot you can do at this point other than take out any money you have in the stock market. 

In short, it would be very bad for real estate investors, and having my predictions from this article thrown in my face would be the least of my problems.

That being said, it’s not going to happen. After all, these are the steps we’d have to go through to get there:

1. No deal can be reached by June 1.
2. No deal can be reached before the Treasury runs out of money to make interest payments.
3. No extension nor temporary deal is made to pay for interest payments.
4. Once the financial markets begin to panic after a payment is missed, Congress doesn’t immediately change course and make its debt payments.

I would say the odds of 1) and 2) are at least possible, albeit unlikely. 3) is basically impossible, and 4) is downright unfathomable.

And that’s all assuming the Biden Administration doesn’t pull an end run around Congress through some legal chicanery, which they could potentially do if the debt ceiling deadline passes and default looms near.

Yes, it’s never wise to bet your money on the wisdom of politicians, but I do expect them to intentionally breathe and eat and sleep, and avoiding a default when there’s money to pay isn’t asking much more than the previously mentioned expectations.

Conclusion

MSCI puts the odds of default at 2%, with its head of portfolio management research, Andy Sparks, stating that the probability “is small, but it’s not zero.”

That kind of reminds me of this meme.

Yes, the prospect of a potential default makes for great headlines, but it’s extraordinarily unlikely. 

But moreover, there is little the average person can do to affect it, and it’s too late to make any broad adjustments to such a dire scenario.

In general, however, we are sailing through volatile economic waters even if a government default is not in the cards. As I wrote before, 

“[The] best investors often do the best during recessions or volatile economies. They don’t do so, however, by sitting on the sidelines. Instead, they keep their [cash] reserves high, adjust to the environment, sharpen their pencils, and continue…”

There will be economic troubles ahead. Be cautious and conservative, but don’t stop and merely hunker down because of a few doomsaying headlines. 

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Is the future of healthcare digital? Elias Pour, the founder of Singapore-based tele-health platform ORA, thinks it will be – but also believes the winners in this market will offer more than simply a digital experience. ORA, which is today announcing a $10 million Series A financing round, is a vertically-integrated platform built on the basis of that view.

Pour is a former chief marketing officer at the South-East Asian e-commerce giant Zalora, where he spotted an accelerating trend well before the Covid-19 pandemic focused more attention on digital health. “We saw a younger generation of consumers in the South-East Asia region really taking much more interest in looking after themselves,” he recalls. “They wanted to look good and feel good, and they were devoting more of their disposable income to that.”

Pour’s vision for ORA started there, with the business launching in 2021. It offers healthcare services through three separate brands: Modules is dermatology-focused, offering skincare treatment and advice; andSons is focused on the male health market; and OVA delivers female reproductive healthcare. The brands operate individually but sit on the infrastructure that ORA has built at a group level.

With consultations provided digitally, ORA has grown quickly. It has delivered more than 250,000 consultations since its launch, with customer numbers growing every single month. But importantly, Pour believes vertical integration is the key to building a sustainable long-term business, particularly given factors such as rising pharmacy costs. The business has invested in physical clinics through which it can also offer care, it owns its own pharmacy operations, and it is also developing its own ranges of treatments and products. Its brands should be available within 1,300 stores later this year.

The direct-to-consumer model works especially well in South-East Asia, Pour says, where around 40% of healthcare spending is paid for by individuals themselves. Build in demographic factors, including the rapid growth of the affluent middle-class population in several countries across the region, and concern about fast-rising healthcare costs, and there is scope for a vertically-integrated challenger brand to have a huge impact.

It also helps that the areas in which ORA has chosen to focus on are those where people need help with chronic conditions rather than one-off treatments. Around 70% of the company’s revenues are recurring – largely through subscription plans – and ORA boasts better retention rates than Netflix, Pour says.

Building those relationships with younger people, who want support with non-life threatening conditions that nevertheless undermine their confidence and happiness, is crucial, the company believes. “Our whole thesis is that if we can build those relationships of trust today, we can also help our patients with other conditions later in life,” Pour adds.

Indeed, expanding into new treatment areas would be an obvious strategy for growth, with ORA already looking closely at areas such as weight management. The company is also eyeing geographical expansion. The Middle East, where consumers also pay for significant chunks of healthcare costs out of their own pockets, is one possibility under consideration – ORA is specifically focusing on the Gulf Cooperation Council (GCC) countries as likely target markets.

Hence the need for investment. Today’s Series A announcement takes the total funds raised by the company to more than $17 million, with the round led by TNB Aura and Antler, and participation from Gobi Partners, Kairous Capital and GMA Ventures.

Charles Wong, a Founding Partner at TNB Aura, believes the company can continue to grow quickly. “ORA’s combined focus on specialised and often taboo healthcare verticals, as well as a direct-to-patient approach, has led the team to clearly differentiate itself,” he argues.

Teddy Himler, Global Partner at Antler, adds: “There are more than 1 billion people in South-East Asia and the GCC who are under-served by the traditional healthcare system, and we think ORA’s platform approach is the future of direct-to-patient healthcare globally.”

Investors in other businesses also think the potential is huge. In Australia, for example, the tele-health business Eucalyptus has just raised more than $30 million of new funding. Hims & Hers, one of the best-known businesses globally in the health and wellbeing sector, recently announced that sales almost doubled last year, to more than $500 million.

“We’re defining a new category in which we combine prescription, over-the-counter and strong consumer products into one proposition with outstanding post treatment service and clinical continuity,” adds ORA’s Pour. “This patient segment is putting healthcare and disease prevention at the top of their concerns and following with their share of wallet.”

David Greene:
This is the BiggerPockets Podcast show, 766.

Kim Meredith-Hampton:
2022, we were the top area, Tampa MSA. We had a net migration of 1.9. Tourism is big, maritime industry, healthcare big here.

Victor Steffen:
I look for population growth in a market. I look for median wage growth in a market, and I also look for employment growth. And Dallas-Fort Worth has all three of those metrics going up into the right.

David Greene:
What’s going on everyone? This is David Greene, your host of the BiggerPockets Real Estate Podcast here today with one of my favorite co-hosts, Dave Meyer. Dave, what’s going on from Amsterdam?

Dave Meyer:
Not much, man. It just hasn’t stopped raining all spring. It’s a little bit depressing to be honest.

David Greene:
Yeah, Amsterdam, that sucks.

Dave Meyer:
Yeah. But hopefully it will turn nice here, but all is well other than that.

David Greene:
Yeah. What doesn’t suck is today’s show. We have a humdinger.

Dave Meyer:
A humdinger?

David Greene:
Humdinger of a show. You are going to love this. Dave and I interview Victor and Kim, agents in their respective markets of Tampa Bay and Dallas, and we get into the nitty-gritty of how to make money in those markets, details about those markets. We talk about how to look at the metrics of who’s moving there, what jobs are going there, what strategies work in markets, as well as different ways to look at real estate. And what’s cool about this is, if you understand the questions that we asked them, you can ask these of anybody when figuring out a market. Dave, what were some of your favorite parts?

Dave Meyer:
To be honest, my favorite thing about this entire episode was the nickname you invented for me at the end of this episode, but that has nothing to do with real estate. So my actual favorite parts is when we talked about some of the metrics that help you as an investor understand not just the long-term strategies and prospects of an individual market, but also how to adjust your tactics for bidding and what strategies to use and whether you should add value, and some of the short-term things you can do to adjust to market conditions based on some of the metrics that are honestly pretty easy to look up for any market.

David Greene:
Before we bring in our guests, today’s quick tip is, head over to biggerpockets.com/blog where you can read tons of articles about stuff you may not have thought about because you’re only listening to the podcast. Dave, I believe you write articles for that blog. Is that correct?

Dave Meyer:
I write articles all the time on the blog and I’m offended you don’t read every single word of every one of them.

David Greene:
I used to. I will admit, I was a BiggerPockets junkie, so I’d be working like graveyard as a cop and nothing would be going on and I’d be reading every single blog that anybody wrote and I remember a lot of them. It’s been a while since I’ve been on there, but you might be bringing me back because you asked such good questions today.

Dave Meyer:
I’m just kidding. But yes, I write for the BiggerPockets blog a couple of times a month, mostly about market conditions and any economics or data trends that impact real estate investors. So definitely go check those out. And I also love if you comment on any of the blog posts that I write about ideas that you want, if there’s a topic or research-based thing that you want to understand better as it pertains to real estate investing, let me know on the BiggerPockets website. I love hearing from everyone.

David Greene:
We would love that. We’d also love if you would comment on the YouTube channel itself and let us know what you think about it, and specifically, what do you think about the nickname I came up with for Dave? All right, let’s get to the show. Victor and Kim, welcome to the BiggerPockets podcast. So nice to have you guys here. Let’s get this thing kicked off by having each of you introduce yourselves. Kim, let’s start with you.

Kim Meredith-Hampton:
Sure. Kim Meredith-Hampton and I am in the St. Pete, Orlando, both those MSAs, two offices, and own short-term rentals, long-term rentals, couple of multi-families and a couple of commercial building and everybody wants to come to Florida, so look me up, BiggerPockets/featuredagents. There you go.

David Greene:
They sure do. I’ve often said, it’s like someone took the United States and just tilted it down into the right and everything is slowly migrating.

Dave Meyer:
It’s gravity. It’s like gravity.

David Greene:
Settling right in there. Victor, how about you?

Victor Steffen:
Cool. Thanks for having us on guys. Really looking forward to it. Victor Steffen. I cover the Dallas-Fort Worth market. Active investor, active real estate and friendly agent. My wife and I, we own real estate in three different states, Pennsylvania, New York, Texas, a variety of asset types similar to Kim, multi-family, single family. We do rent by the room housing where it’s appropriate, short-term rentals, long-term rentals, the gamut. So we try and walk the walk before we help investors do the same.

David Greene:
Yeah. It looks like you do a little bit of everything. You’ve got 48 doors across three states, so you’re a long distance investor. Way to go. We have that in common. And then you’re also doing rent by the room, long-term rentals. It looks like whatever it takes to make that thing cashflow you’re willing to do. Is that fair?

Victor Steffen:
If the market supports it, we’re down to try it. So, that’s it.

David Greene:
Yep. Welcome to 2023.

Victor Steffen:
To be fair, though, a lot of those out-of-state ones in Pennsylvania and New York, it hasn’t been all sunshine and rainbows, David. I know you could probably attest to. It can be a little bit difficult on those out-of-state ones. So we’ve had some boots on the ground there for a long time and I’m from that area, so it made it a little easier.

David Greene:
Well, that’s what I talk about on long-distance investing. You want to have a competitive advantage and having boots on the ground and people in the area, it’s one of the things that does that. Kim, you’ve got a pretty impressive portfolio as well. So you have, is it 50 units of short-term rentals?

Kim Meredith-Hampton:
Yes, we just did that. Been there about a year, actually. Took three multis, repurposed, remodeled and turned them into furnished flex leasing basically.

David Greene:
And was it difficult to work with zoning with the city to get that to happen?

Kim Meredith-Hampton:
It wasn’t because these were actually in D.C., too, which is allowed for like an Airbnb or B&B, or anything like that. So that was quite easy, just knowing what licenses you need and those types of things. And now they’re getting ready to come inspect again so, you know, they want your dollars.

David Greene:
So in essence, you bought an apartment complex and you turned it into several short-term rentals?

Kim Meredith-Hampton:
Yes, the whole thing.

David Greene:
Okay. And then you also have a property management company as well?

Kim Meredith-Hampton:
Yeah, we have a long-term property management company with about 3,000 units between Orlando and Tampa, St. Pete, and those are long-term. And then we also have the Florida Nest, which manages the short and midterm.

David Greene:
All right. And it sounds like you do it all, right? Whatever an investor needs.

Kim Meredith-Hampton:
We do. I like to say we own the full cycle of real estate and I love that people, love that they can come to us and we can help them with everything. And if we can’t do it, we can get them in the right direction.

David Greene:
It sounds, Kim, like you’ve been involved in Florida real estate for a while now. What have you seen with the market shifting from 2020 to 2023?

Kim Meredith-Hampton:
Believe it or not, we are still in a seller’s market, but it is starting to tip a little bit. You’re starting to see the breakage there happen. Instead of maybe having 10 offers, there’s three to five and some of them were getting as a backup to that. So a lot better than just, “No, we’re done. It’s all cash, out of here.” Days on market definitely are a lot longer. I think seven days now we’re at 39 right in there. So it’s definitely changing. Price points have not went down yet, but you can ask for things.

Dave Meyer:
There you go. Love that.

David Greene:
So you’re saying, it’s hot, it’s strong, but it’s not as hot as it was at the peak maybe?

Kim Meredith-Hampton:
Yeah, very true. Very true.

David Greene:
And what do you think has contributed to the, it’s still strong but it’s slowed down some? Interest rates?

Kim Meredith-Hampton:
I think the interest rates are usually the biggest ticket. I sell a lot of multi-family and invest in it myself and a lot of those numbers just don’t work. If we can try to get maybe seller financing or something assumable, that’s usually what we’re trying to do.

David Greene:
Okay. And then in your market, what are some of the long-term benefits that you see in Florida?

Kim Meredith-Hampton:
There’s no state income tax. The weather is gorgeous. It’s very cultural here, very artsy, and I think that’s why you had a lot of people move here. I think 2022, we were the top area, Tampa MSA of new people moving here. We had a net migration of 1.9 and that hadn’t happened here since 1957, which is crazy to even think that, but I always say our little St. Pete area reminds me, David, of a little San Diego. I think if you can get in here now you’re still going to be better off in the long run to real estate.

David Greene:
What do you think is driving this population growth?

Kim Meredith-Hampton:
Most of it I think has come from California, New York, all of those things, and the area’s growing in general. With construction, you’ve got that. The jobs are just absolutely wonderful. We’re around 2.5% I think unemployment right now. Tourism is big, maritime industry, healthcare big here. I think it’s just a mixture of things. I can’t pinpoint one thing on it.

Dave Meyer:
One of the things I see when I do analyses of different markets is that Florida tends to be very polarizing. When you look at the top growing markets, they’re in Florida. When you look at the lowest growing markets, they’re also in Florida. So I feel like there’s a lot of times you see both ends of the spectrum. So what is it that is different about Tampa? You said jobs, but are there anything else that set Tampa apart within the state of Florida that you think make it a unique housing market or opportunity for investors?

Kim Meredith-Hampton:
I think for a long time we were really under the radar and price points were lower than a lot of other places, but just those cultural things, plus you have the water on all different sides here that Tampa and St. Pete really are one. There’s just a bridge between them, so there’s a lot of things that you can do and see and get to the beach, but you can go to the art cultural thing. There’s so many different things that it offers to people and I think especially since COVID they found that and they’re like, “We’re there now. We want to be there.”

David Greene:
So one of the things that I, as a somewhat experienced investor and real estate broker, have settled on as one of the key metrics that I look at in any market to figure out the strength of it, and it’s funny, it’s not often talked about, is just days on market. If I can tell how long houses are sitting on the market, I can tell you so much about a market. Dave, curious if that made its way into your book, Real Estate by the Numbers? Did you guys talk about that?

Dave Meyer:
No, it doesn’t. Real Estate by the Numbers is more just like the math. There’s less market selection in there.

David Greene:
It’s more individual analysis?

Dave Meyer:
Yeah, it’s like deal analysis, less than market analysis. But I totally agree. I mean, I think days on market and active inventory are great because they measure both supply and demand at the same time. It tells you not only how many things are available but how quickly they’re coming off the market. And in terms of strategizing and determining how you’re going to approach different deals, that’s hugely important.

David Greene:
Yes, exactly. And Kim, I’m curious, if I looked into the days on market in the Tampa St. Pete area, what is the pattern that I would see over the last couple of years?

Kim Meredith-Hampton:
Last couple of years it started, you were probably about 45 days, then it started to tighten up as we went through COVID. And then on the backside of that, as we know, our crazy time over the last two years, it was about seven days. Three to seven days was really what your active market was, which was an insanity. And now it’s gone to 39 days, which tells me we are headed back to our normal, whatever our normal is, but I think it’s inching back that way. I think probably in another six months you’ll see that this will definitely be more of a buyer’s market than it is right now.

David Greene:
And what do you think is going to bring that about?

Kim Meredith-Hampton:
I think you got a lot of things, especially the rates. I guess they’re going to probably go up again. I’m not sure after that, but we’re just trying to hold on and get people things by buying down rates with mortgages and offering, “Hey, can we have a concession,” or that type of thing. But I think that’s really going to hurt us in the long run, are the high interest rates. And so I think that’s going to level off.

Dave Meyer:
Can you tell us a little bit about the rental market and what’s going on with rents in Tampa?

Kim Meredith-Hampton:
Our average rental price right now is about 2,000 and that is even for a one bedroom.

Dave Meyer:
Wow.

Kim Meredith-Hampton:
And so it has went up significantly. They went up around 22 to 25% over the last two years, and now I’m starting to see, in the last two months, a little bit of a softening on that. So what’s happening is now, as renewals come back around, people are going, “Oh, can’t we raise it another $300?” No. No, we’ve got to be careful on that because you don’t want to… Occupancy is the great thing. You don’t want to have that vacancy in the property. Numbers, though, are still strong. Still need inventory.

David Greene:
Kim, it sounds like you know your market. This is great. We’re going to come back to you in a little bit to talk about what strategies are working there, but I’ve already learned more about Tampa St. Pete in the last 10 minutes than I probably have in my whole life before this. This is why I love talking about real estate. I nerd out over this kind of stuff. So thank you for that. Victor, let’s hear about your market. Where is it again?

Victor Steffen:
I cover the Dallas-Fort Worth metroplex.

David Greene:
Oh, that’s not a hot market at all right now, just like Florida.

Victor Steffen:
Yeah. Cooled off a lot. No, I’m kidding.

David Greene:
What have you seen with your market shifting from 2020 to now?

Victor Steffen:
It follows a similar macro trend to what we’ve seen across a lot of the country. Middle of May, 2022, you really saw almost like a peak. Middle of May, down through the first to second week of February, there was a pretty significant decline in terms of the number of offers that we saw being accepted, or not so much being accepted, but the number of properties going under contract. We saw almost all of our offers being accepted as investors during that time just because a lot of retail buyers started to pull out of the market when there’s a lot of uncertainty.
So February comes, I think we hit a little bit of a support level there because since then we’ve actually seen an uptick in terms of buying pressure. We’ve seen days on market actually start to contract. We hit a 10-year peak in terms of days on market in February. It went up to about 39 days. Since that peak has come all the way back down to 21. So, looking like we’re coming into more of a neutral market environment. I think it’s actually a very healthy place now. We’re not red-hot like we were before, but you’re not walking in 10% below this price on a lot of these offers like we were, say, November and December of ’22.

David Greene:
Something I was curious, I didn’t ask you Kim, so just briefly if you could weigh in this also, have you each noticed new construction ramping up as the market has heated up in your individual markets?

Kim Meredith-Hampton:
Yes, very much so.

Victor Steffen:
I always say, some of the things that Dallas and Fort Worth do best, we don’t do a great job at building a lot of high density housing. We do a great job at building very large single family houses. In our new construction inventory we couldn’t even touch through 2021 and 2022, the first half of 2022. It was just moving too quickly and there was a lot of wait lists. This is something that a lot of our investors have been jumping into now that the market has softened because builders do have more excess inventory than they had through the peak of COVID and for the last, probably, two to three years. So that’s a great asset type for our investors to jump into right now.

David Greene:
Yeah, I was thinking about that because both of you have strong population influx, people moving into the Tampa area, and when you have too much population but not enough new inventory hitting, you get that crazy, no contingencies, all cash, everything way over asking 20 offers. It’s kind of what we get in the Bay Area when we get hot because there isn’t anywhere to build. They’ve already built everything out. Whereas Texas, and I haven’t been there a lot, but I imagine sprawling land. Just a lot of it everywhere. And Florida, same thing.
It was a swamp and they’ve just started to build out there, so there’s still space that they can build more housing, which means you’re likely to see a strong but still somewhat, relatively speaking, affordable market for the near future because if it gets too crazy, they just build more homes and then the increased supply kind of balances out the demand. That’s really a healthy market. That’s what we’d like to see versus some of these other areas like San Diego that there’s nowhere else to build. They put all the houses they could fit inside San Diego already. It’s hard to get enough supply to keep prices down. So we talked about new construction being a legit option out there in Texas. What are some of the long-term benefits to Dallas-Fort Worth real estate?

Victor Steffen:
I want to take one small step back into what we were talking about just a little bit ago. We love seeing these new supply, new construction houses come online, but we’ve definitely seen, if there’s not a mix of zoning associated along with that development, those single family houses, they’ll sit. For example, if you go to the east of Dallas there’s a community called Forney. Forney has done an excellent job at bringing in commercial real estate as well as mixed use real estate, plus those large, sprawling affordable housing developments. Whereas if you go toward other directions, for example the far northeast side of Dallas toward Melissa, you don’t have as diverse zoning. So you’ve got a lot of single family houses that have been sitting. So I think as an investor it’s definitely important to look at those multiple zoning types in those markets.

Dave Meyer:
Is the implication there that buyers just want access to the amenities that come with mixed zoning?

Victor Steffen:
100%. If you have an HEB you go up anywhere in Texas, property values will double. No, I’m kidding. They’re not going to double. But-

Dave Meyer:
That’s a grocery store, right? Just for people listening who aren’t familiar.

Victor Steffen:
Here, everything’s better.

Dave Meyer:
Yeah.

Victor Steffen:
Okay, so you got to get down to Texas, go to Heaven and get yourself a barbecue sandwich. They’re amazing.

Dave Meyer:
Now we’re talking. I’m in.

Victor Steffen:
So, all right, back to the original question. Whenever I talk to my clients about, “Hey, what direction are we going? Do you think that we have a long-term viable product here?” I recommend that they invest the same way that I invest. I look for population growth in a market. I look for median wage growth in a market, and I also look for employment growth. So where are jobs going, where are people going, and where are better quality jobs going, not just a whole bunch of jobs that are paying minimum wage, but engineer-type of jobs and manufacturing jobs and stuff that’s going to move the needle in terms of income. And Dallas-Fort Worth has all three of those metrics going up and to the right, so we’re really bullish on that market for the next foreseeable future.

Dave Meyer:
I was just going to ask the same question, ask Kim, why is it that Dallas has experienced all those things? And I know you’re going to say, “No state income tax,” but Kim already said that, so you have to say something else.

Kim Meredith-Hampton:
I already stole that one.

Victor Steffen:
Yeah, she got no state income tax. She also got the good weather. Although, for the past couple of years, Dallas has been getting smacked with some ice storms, which has been interesting.

Dave Meyer:
Oh, don’t complain about. You are from Scranton.

Victor Steffen:
I know. I know. I know.

Dave Meyer:
You know what bad weather’s like.

Victor Steffen:
I got soft moving south, I tell you. Goodness gracious. I used to be able to go and play football in the snow and sleet and rain and no sleeves and be all good to go, but now it’s 40 degrees and I’m shivering. But I like to talk about midterm rentals and what draws people toward midterm rentals. And a lot of the reason that people would be attracted to a certain midterm rental market are the same reasons that give a certain market economic viability. For example, there’s six main midterm rental strategies or six main midterm rental attractions that we like to focus on. So you got major universities, military systems, so say military bases, right?
Large international airports, large corporate employers, so Fortune 500 companies. Downtown attractions or tourism attractions are another huge one. And then if you went in and looked at, say, entertainment districts, so if it was like a Six Flags or something like that. So if you have five or six or even down to three of those main attractions in close proximity, you’re going to have a lot of good upward pressure in terms of price, jobs and good quality high-paying jobs that drive up median income in Texas. Specifically DFW has all six of those industries in close proximity.

David Greene:
What about price drops? Has there ever been a time out there in the last year or so that you’ve seen prices come down? Is there anything like that happening now?

Victor Steffen:
Yeah, for sure. We had a beautiful little season, like I was saying a bit earlier, from the end of May through the first week of February when it was, almost all of my investors’ offers were getting accepted and we were putting out offers eight, nine, sometimes 10% below the ask and they were getting picked up. Even if you look at the data, the sale data, I was combing through it a little bit this morning prior to this call, you’ll see that there was a significant decline in median sale price. We definitely hit a floor around that middle of February and it’s been climbing back since.
There’s still opportunity to go in and walk underneath fair market value, but you’ll find that instead of picking up something for 95% of fair market value, now you’re closer to 98%, which is a lot better than 105% like we were in COVID, or even 110%. And I know David out in California, you can attest to that. So there’s still a little bit of discounts to be had, especially if you can throw out a volume of offers and take a couple of shots at some that have the concessions built in and lower purchase prices.

David Greene:
What about inventory? This is a challenge in my market, is that rates are going up, everyone’s expecting prices to come down, but sellers don’t want to put their house on the market because they have a 3% interest rate and they’re probably going to have to pay the same for the next house that they sold theirs for, so they’re just switching from a 3% to a six-and-a-half and they’re not getting anything any cheaper. Is this a problem for you with just listings in general hitting the market?

Victor Steffen:
Yeah. This is something I actually wanted to touch on and it’s super interesting. I know Dave Meyer, you’re going to like this because you’re a numbers guy. April of 2022, the April data just came out. We had 8,619 sales. It’s been over a decade since we’ve had it in April with that few of sales. If you look at the number of homes that were on the market even back in 2013 and ’14 and ’15, it’s a quarter of the inventory that we have available now, and you’re still seeing a huge reduction in terms of the number of properties that are moving. And that’s just reflective of a very, very, very tight inventory of supply.

Dave Meyer:
This is a great point. I want people listening to take note of this because there’s a lot of headlines about how inventory is going up. I actually pulled this before that inventory in Dallas has gone up 53%, which makes it sound crazy. People are like, “Oh, my God, it’s going up.” But I looked at March of 2023 compared to March of 2019, pre-pandemic, and it’s 60% of what it used to be. So we’ve seen a 40% decline even though it went up 50%. So you have to almost not throw out, but sort of not just look at year-over-year data or really compare current trends to the really unusual market that occurred from 2020 to 2022, and just recommend, if you are listening to this and thinking about these metrics for your own market, you should look beyond, back past COVID into what was going on in 2018, 2019 to get a better sense of where things are relatively.

Victor Steffen:
Well, here’s another thing. Each one of these metrics, you can’t look at them as a stand-alone metric. I think if you look at everything altogether, it paints a much clearer picture, but headlines don’t like clear pictures. They like saying, “Hey, inventory is climbing,” or, “Days on market is going through the roof and we’re at the highest number of days on market in the past decade.” That’s headlines. But if you take them all together, it looks like a much different picture.

David Greene:
All right. Kim, switching back to you. Tampa, St. Pete, what was the other city that you mentioned?

Kim Meredith-Hampton:
We do Orlando, too.

David Greene:
Orlando. Thank you. What strategies are working out there right now?

Kim Meredith-Hampton:
As far as getting deals under contract?

David Greene:
Of getting deals under contract or finding something that will cash flow? Can you find anything that you’re not going to lose money on out there?

Kim Meredith-Hampton:
Yes, you can. It’s like a needle and a haystack, of course, still, because of lower inventory, but really, as I mentioned earlier, really trying to buy down the rate, trying to get seller to give us closing cost and also putting in escalation clauses, are still a thing here. And we’ve got, I think, three separate ones last week because of our escalation clauses. So it’s still alive and well here as it was last year, but that has really helped us garner some more deals than we probably would have.
And most people that are looking at multi-family, still difficult. I just picked up that office building and I got a great deal on it and I put some money into it, but now it’s worth a heck of a lot more. So those are some things I think that people can look at whether they want to do a JV on it or syndication, but looking at some other asset classes, too, in your mix of buying real estate.

Dave Meyer:
I’m curious, Kim. Are you seeing any regulations come in in Tampa regarding short-term rentals?

Kim Meredith-Hampton:
There hasn’t been anything on the short-term. They’re definitely in Hillsborough County is a Tenants Bill of Rights, and the same thing in St. Pete. They have that now. The only thing I’ve seen lately is over in Indian Rocks Beach. They didn’t want more than 10 people in a home and some of those houses fit like 20 heads-in-beds they call it, and you could not park on the street either. They only want them on the pavement, you know, the garage area, so little things like that. I do sit on public policy at the Pinellas County Board of Realtors, and we are on that constantly to try to keep those things out of play for our investors. So, hard to say, but I think DeSantis also really helps with that. He really wants to set the playing field at the government level rather than the municipalities doing that, so that’s something that’s going on right now, too.

David Greene:
Okay. So, it’s very hard to get a cash-on-cash return. A lot of investors have been forced into short-term rentals when they didn’t even want to be there, and even that’s becoming something that’s being super hard to be able to turn a profit, especially with all the competition. So, with a growing market like Tampa, what is the play in your opinion? What’s the approach an investor should take to make money in that market?

Kim Meredith-Hampton:
What we do, because we only work with investors, when we send out properties, we have a total of nine agents. We’re having extra 10 agents that are constantly sourcing every day. And before we send those out we run the short-term comps, we run the long-term comps, what will the taxes be based on that, and just anything else we can garner from that, and that’s what we’re sending out. I want them to have that backup plan.
What if the short-term doesn’t work and they do pass something for that municipality? What can they rent it for? So those are some key things, or could we maybe look at some shorter midterm and they’ve got a long-term, maybe we could work it that way. And that’s what’s nice because we do have two different property management companies. It’s like a great marriage here and so we can try to figure out which way would work best for them. So we’re always trying to look ahead.

David Greene:
Do you feel like it’s an appreciation play? Do you feel like there’s a value-add element there?

Kim Meredith-Hampton:
100%. I mean, we just got voted, St. Pete, the Best Place by Forbes Magazine for a vacation. I mean, how great is that put out there? But always, always, I’m looking on the backside. Is this an area that’s gentrifying? Is there something different we can do? Can we do some rehab to it, make it up and then leave a little skin in the game for somebody else to do? So we’re always looking at every little piece of it. It isn’t just one thing.

David Greene:
Do you think this is a good time for someone to invest in Tampa?

Kim Meredith-Hampton:
I do, especially the St. Pete market because I really do feel we are on the verge of being like a San Diego, and you know those prices better than I. Our average price right now is about 400.

David Greene:
Oh, wow. That’s low.

Kim Meredith-Hampton:
St. Pete, years ago, it was two or 300. So, I mean, you take a look at that. It’s that woulda, coulda, shoulda. Hindsight’s a great thing, so I think it’s a great time to do that.

David Greene:
So what you’re saying is, that area’s landlocked, it’s tough to build out there, so-

Kim Meredith-Hampton:
Correct.

David Greene:
… the prices have nowhere to go but up.

Kim Meredith-Hampton:
Exactly.

Dave Meyer:
So, yeah, I mean, I think that’s an interesting long-term point, but Kim, you mentioned in the beginning that you think it’s shifting from a seller’s market to a buyer’s market. How are you navigating that?

Kim Meredith-Hampton:
I’m celebrating. Celebrating.

Dave Meyer:
But if there’s a risk of price declines, how are you strategizing accordingly?

Kim Meredith-Hampton:
And actually right now, I don’t think that I see that. We’ve really never had that in Florida. And when you’re talking about… We had the 1.9% net migration over the last 12 months. We had the best job market here. Those things all culminate together. I don’t foresee in the near future where we’re going to go down in value. It’s not like in Ohio or Iowa or something like that. I mean, it’s very different here.

Dave Meyer:
Yeah, but year-over-year the prices are pretty flat, right? Now they’re pretty close to flat.

Kim Meredith-Hampton:
They’re like 3%, two or 3% up from last year. But even if we’re back to a normal market, that’s typically three to 5% almost always, ever since I’ve been over 20 years, it’s always been that three to 5%.

David Greene:
Yeah, that’s a great point that it’s typically been three to 5%, which, it doesn’t sound significant until you compound it over five years.

Kim Meredith-Hampton:
Yes.

David Greene:
You’re talking about 15 to 25% and that’s on the total price of the asset. So if it’s a $500,000 property, 15% of that is going to be $65,000, but you probably only put 20% down, which, say, would be 100,000. That’s a 65% return over five years just on appreciation before you get into anything else, which is just one of the reasons that I love real estate and I can’t stop talking about it. So, last question about that market. What should investors look for in an investor-friendly agent?

Kim Meredith-Hampton:
Oh, wow. This is a big question and we get this a lot. My team say, we only work with investors, so I speak their language and I will put 110% into it because I’m looking at it through my investor eyes. I know about cash flow, appreciation, cap rates, all these things that you go to a retail agent, they have absolutely no idea what you’re talking about. And when you really want to work with an investor-friendly agent, do your homework. The best I can say is that you definitely want someone like that on your side.

David Greene:
What are some questions that someone should ask if they’re trying to determine, is this a… What’s the cool word, a casual agent, or is this a…

Kim Meredith-Hampton:
Is that the term now? I’ve never heard that one. Casual.

David Greene:
Calling someone a casual is an insult. It’s like calling them basic.

Kim Meredith-Hampton:
Basic. Okay.

Victor Steffen:
Maybe the phrase retail agent could work there.

David Greene:
Retail agent. Okay.

Kim Meredith-Hampton:
I say retail. Yeah.

David Greene:
Okay. That’s our version of calling somebody basic in this space. It’s a big insult, but it’s veiled in professional speak. So what are some questions someone can ask to reveal this?

Kim Meredith-Hampton:
I think a huge one is, do you own any real estate yourself? To me, that’s huge. If you’re doing this for a living, it blows my mind some of the people that do not own any type of real estate or even their own home. To me, that’s the biggest question you can ask.

David Greene:
I want to stamp that, second it. That is such a good point. And here’s the reason that I just realized when you were talking, I’ve never said before. When you own real estate yourself, you develop this sixth sense for what would be good and what would be bad in a property, in a location, in an area, in a law, that is very difficult to quantify. So if you do rent by the room, you look at a house and you get this feeling like this wouldn’t work. And then when you play with it in your head you’re like, “Oh, there’s not enough parking,” or, “The bathrooms are in the wrong place,” right? “The setup is not going to work for this,” versus, “Oh, this house would be great.” Then you got to think for a minute to articulate why you feel really good about this as a short-term rental, or rent by… Whatever it is.
When you don’t own real estate yourself, as an agent, you don’t have that sixth sense. You cannot guide your clients. So to agents I would tell them, get better at articulating what it is that you see in a proper you like so people can enjoy it. And as the investor, I would say, just like you did Kim, look for an agent that owns property themselves because they will have that gut feeling that will tell them, like, “I wouldn’t want to own it,” or, “I would.” And then you made a great point, too, ask about their production. That’s always a somewhat awkward thing to talk about. If anybody who’s good at anything does it a lot, there’s no one who’s really good at something that doesn’t do it very often, and if you’re an agent that sells two houses a year, you can be super nice, you can answer your phone on the first ring, you can be really available, and you’re really bad.

Dave Meyer:
Well, it’s easier to answer your phone on the first ring if no one’s calling you.

David Greene:
That’s exactly right.

Kim Meredith-Hampton:
Yes, exactly.

David Greene:
That’s exactly right.

Kim Meredith-Hampton:
I’ve seen really interesting things happen with retail. I call them retail agents. I’ve seen where they’ve sold something in a subdivision and there’s not allowed to have rentals, which people had to sit there for a whole year on that. I’ve seen in an association where they have to be married, or sister or brother, and you sell it and you’re like, “They want to rent it to students because it’s five minutes from UCF.” You’re like, “What?” I mean, just crazy little things like that. Or they said, “Oh, you can do a short-term rental here,” and they buy all the furniture and they buy everything and they call me up and they go, “Is this true? I can’t rent here?” I go, “No, you can’t rent there.” Yeah, it may seem so insignificant, but in the end that’s huge. Those are a lot of dollars you paid for that property. It’s a lot of money out of your pocket.

David Greene:
Don’t you love it when the person use a different realtor and then they call you to say, “Is it true that I can’t do this? Can you help me?” It’s always that feeling of when the girl chose another guy over you and then she wants to call you to complain about her new boyfriend. It’s a very unique feeling when you’re in the real estate space that a lot of people that are not realtors wouldn’t understand. But, yes, those are some great, great points. I think that’s one of the reasons that, when I’m investing, I like to work with an agent that either owns a property management company themselves, or owns real estate or some combination of the two for those exact reasons that you just mentioned because the wise man and the wise woman learns from the mistakes of others rather than just their mistakes.
Also, a good analogy for you. You may get great service at a restaurant when you’re the only person there. The waiter is super attentive, like we were just saying. They answer the phone on the first ring, but that usually means the food sucks, if you’re the only person in the restaurant. There’s not a line to get in, that’s not a good sign. Just because they have great service isn’t the only reason you’d want to eat there. So, keep that in mind when you’re working with agents, too. All right, Victor, turning back to you, what strategies are working in your market?

Victor Steffen:
Cool. There’s two main ones, and I always tell my clients, like, “Hey, we’re not trying to fit a square peg in a round hole. We’re going to take what the market gives us, and what is the market giving us right now, specifically in DFW?” One is a BEAF-style deal, BEAF, and that was just an acronym I decided to use because I explain the same model so many times to so many different investors. It’s Break Even Appreciation Focused. So these are very heavily appreciation based plays, but they’re assets that are going to go ahead and cover themselves. They’re going to cover their debt service plus a little bit of yield on top to cover your PITI payment.
The other method that we’re really liking in specific areas, specifically Irving, just to the northwest side of Dallas, is that midterm rental play and short-term rentals, Irving has a more favorable STR and MTR market than Dallas, and there’s been a lot of changes, a lot of regulations. I know STRs right now are the Wild West, but Irving has stood the test so far and they’ve been an attractive market. They’ve also got all six of those main macro drivers that we’ve mentioned about before that are going to make a good MTR attraction type of a deal.
So these BEAF-style deals, Break Even Appreciation Focused, that’s where the bulk of our investors have been trending toward. These are relatively recently built assets. They’re mostly ranch-style homes. You’re looking at stuff that’s three, four bedrooms, 1,800 plus square feet. It doesn’t need a lot of CapEx. You don’t got to put a lot of cash into them, and you can get these in B plus A grade areas that investors just didn’t have access to before when assets were moving with 25 offers. So those types of deals are the ones that are really working well for our clients right now.

Dave Meyer:
The Dallas area is so big, there’s multiple cities and so many different parts to it. I’m curious, do you have any other insights about regions within the Dallas Metro and particular things that work in different areas?

Victor Steffen:
100%. So there’s two main areas that are going to work the best for your BEAF-style deal right now. Recently built, single story, three to four bedrooms, 1,800 plus square feet below the median. The median right now is just under 400,000 for the metroplex. So you want to be in something that’s, say, 325 to 375, right in that range. The markets there that have the highest concentration of that inventory are Aubrey, Texas, which is just to the north side of Frisco. Frisco is hot right now with a lot of short-term rental investors coming in because Universal Studios, they’re building out their new park there. So Aubrey, Texas, huge for this BEAF-style strategy. And then if you go far east of Dallas toward a community called Forney. Forney has been an awesome market for us to find these BEAF-style deals. So those two specific, very nuclear metros is where we point most of our clients to.

Dave Meyer:
Did you invent the term BEAF-style deals?

Victor Steffen:
Absolutely. Texas BEAF, baby. Come and get some.

Dave Meyer:
I’ve never heard that, but I’m using it. I like it.

Victor Steffen:
Yeah, Break Even Appreciation Focus. And it’s almost like what we were talking about before with just time on task and working with an investor-friendly agent. We have these same conversations day after day after day, and it’s just a good way to describe a type of deal that we were selling a lot of, and that we have a lot of investors interested in. So, yeah, feel free to use that. Well, maybe I should trademark it.

David Greene:
So if you’re asking, where’s the beef, the answer-

Victor Steffen:
Aubrey and Forney. That’s it.

David Greene:
It’s Dallas.

Victor Steffen:
There you go.

David Greene:
So, for those that just felt their sphincter tighten, as you said, Break Even Appreciation Focused.

Victor Steffen:
Yes, yes.

David Greene:
You’re triggering a lot of people here-

Victor Steffen:
I am.

David Greene:
… about going into foreclosure. What advice do you have for the type of avatar or investor that should be looking for a deal like this?

Victor Steffen:
Most of our clients who are buying that type of inventory, they’re putting 20 to 25% down. Most people are going to be either out of state or they are domestic, but this is not your cash flow heavy kind of a play. There are markets in Texas that will give you that heavy eight, nine, 10% cash-on-cash return, but this is not the market for it. So most of our clients are going to be high W-2 earner. It’s going to be somebody who’s got 50, 60, $70,000 sitting in a bank account.
They just sold a house, they’re using 1031 funds, something like that, and they want that levered return like we talked about before, when you can go ahead and put 20, 25% down on an asset that’s appreciating by between five and 7% per year that needs no CapEx and is going to lease quickly in a high quality area. You hold it for five years and now you’ve got that 25 to 30, sometimes 40% IRR. So that’s going to be our primary avatar for that BEAF-style deal.

David Greene:
All right. Let me break this down for anyone who… I love your communication style. It’s like the micro-machine man just dumping a bunch of information there. Did you ever get teased about that when you were younger as being the fast talker that said a lot of smart stuff?

Victor Steffen:
I’ve never been teased about being a fast talker and having a lot of smart stuff. I think it comes out because we have these conversations every day with our investors, so as you’re saying the question, it’s like, “This is what I’m going to say.” We talk to a lot of people.

David Greene:
It’s not what I expect out of someone from Texas. You’re supposed to be a slow talker with a drawl.

Dave Meyer:
Yeah. It’s that northeast pattern.

Victor Steffen:
Yes, yes. And I get in trouble with that with my in-laws. Not good.

David Greene:
“You don’t seem Texas, son.” All right. So what I’m hearing you break down is that if your goal is cash-on-cash return, which is typically the return on investment that we use in real estate investing, that’s what you’re used to hearing, if you’re a listener. Really, return on investment can be measured in many ways. Cash-on-cash return is the way that we look at the return on your money by cash flow. So ROI, cash-on-cash return have become synonymous in our world. They really shouldn’t be because ROI is more of a concept than a specific formula. You may break even, you may even lose a little bit of money on some of these deals.
But you mentioned IRR, which stands for Internal Rate of Return, which is a different way of measuring ROI, and that is taking into account all the ways that real estate makes money, or at least most of them. So you’re going to be taking into account the loan paydown, the appreciation you’re getting, if there is cash flow, if you earned a commission on the deal. Anywhere that money came in goes into that formula, and then if you sell it in five years and you make a profit, you divide it over five years and now you get a return on your investment for that year.
The reason that this is worth bringing up, well, first off, that’s how people evaluate larger deals like apartment complexes or multi-family properties when there are a lot of investors putting money into it like a syndication, because they’re making money in more ways than just the cash flow of the apartment complex, although that is one way. When you’re looking at a market that gets high appreciation, like you said, low CapEx, I know why you mentioned that because that’s something that can kill your return if you have to dump money into a property because it’s 70 years old and things are breaking.

Victor Steffen:
Absolutely.

David Greene:
The market is strong, so people are still moving into it, right? You don’t know what’s going to happen, but it’s reasonable to expect that it’s going to continue growing the way that it has. You mentioned wages going up in that area as companies are moving out that way, which means rents are likely to increase overtime as well as how much someone can’t afford to pay for the house. There’s a lot of factors that make that a strong market that don’t fit into a cash-on-cash return matrix.

Victor Steffen:
That’s right. There’s a conversation we have often and it’s like, “There’s nothing wrong with 0% cash-on-cash.” And that’s another, like, I’ve been listening to this show for a long time and if it was 10 years ago and I heard somebody say something like that, I would’ve been like, “All right, delete. I’m not listening to this guy. 0% cash-on-cash.” But the more and more deals we’ve done having invested in heavy, heavy cash yield markets, Midwestern Rust Belt states as well as heavy cash flow markets in Texas, there’s a lot of good to be had when you focus on area and asset type and quality in terms of your IRR rather than just your COC, your cash-on-cash.

David Greene:
Yeah. And just let me make it clear, we are not saying cash-on-cash return doesn’t matter. We are not saying cash flow doesn’t matter. We are not saying to buy a place that bleeds 10 grand a month just hoping it appreciates.

Victor Steffen:
That’s right.

David Greene:
We are just saying, open your perspective. See all the ways that real estate makes money, take all of that into consideration, and then make an investment decision based on what’s best for you. If you live paycheck to paycheck, you’re barely getting by, you have $30,000 to invest, the BEAF strategy is not a great idea.

Victor Steffen:
That’s right.

David Greene:
Okay? Stick with some tuna and some chicken, but you got a great W-2, you have strong savings, you’re making a lot of money. Maybe there’s some tax benefits. You might save 40 grand in taxes doing cost aggregation study on this. That’s a lot of money that you’re saving, even if some, it does bleed a little bit of money every single month, but you’re making a lot of money in other areas. This actually can be a very wise decision. Is that your same perspective?

Victor Steffen:
I’d like to make one caveat here. So, when we buy these BEAF-style deals, most of our investors are very savvy and they’re going to come in and they’re going to say, “Hey, I’m not super comfortable on this. It is cash flow negative, $250 a month.” How we remedy that is, one, you’re buying into a BEAF-style market. Break Even Appreciation Focused. Appreciation does not just mean the asset price itself. That will also go ahead and correlate to rents in that area. You will also expect upward pressure.
Number two, if we’re looking at something and we know for year one it’s going to go ahead and have $200 a month in negative yield, we’ll go and we’ll get that concession for $2,500 from the seller and make up for that upfront cash on the purchase, right? The money’s made when you buy. We’ll make sure that we alleviate that negative yield, that negative $2,500 with concessions on the front-end. That’s usually a good way to help ease the negative yield at least for year one until you have a chance to go ahead and push your rents back up.

Dave Meyer:
Are you adjusting how you’re advising investors in this market? Because rent growth is slowing down, appreciation is slowing down. Are people still doing this?

Victor Steffen:
We definitely advise our clients based on what they’re specifically looking for. We call it a perfect deal statement. For every single client that comes through, I jump on a call with them. We’ll go through what exactly it is that they’re looking for, and if it’s a client who is really looking to replace their W-2 income in the next three years, BEAF is not their deal, right? We’ll go ahead and we’ll push them toward a higher cash flow market or management style. Maybe we will suggest going towards something that’s more short-term or midterm rental friendly so they can increase that yield.
If it’s a client who comes in and they say, “Hey, I’ve got a great W-2. I don’t plan to leave anytime soon. I want to go ahead and have the highest levered return on my money as possible. I want something that’s going to be headache-free because I live in Seattle, or I live in California, or I live in New York.” We will push them toward this BEAF-style deal even as we see a softening in terms of the up and to the right rental rates that we’ve been seeing.

David Greene:
Kim, I’m going to throw back to you. What is the ideal avatar of investor that should be looking in your market?

Kim Meredith-Hampton:
It’s funny, we were talking about this earlier, and Victor and I are probably very same in that. We are very tailored to each individual investor, so we’re not putting them on some kind of auto feed. I find that that sent them a lot of junk. These people, they want to know, for them, the perfect one is that they want to buy a duplex to a quad. They have at least 100,000 to put in, and they’re not queasy as to some value-add to the property and doesn’t scare them. That’s typically what my perfect avatar is.

David Greene:
Dave has written blogs on both of these markets, which you could find at biggerpockets.com/blogs. And if you’d like to find agents like Kim or Victor, we can help you with that, too. Biggerpockets.com has an agent finder that is free that will put you in touch with agents that can help you find, analyze, and close a deal that’s right for you. All you have to do is go to the website, look for the nav bar, find agent finder, search a market like Tampa or Dallas, enter your investment criteria and select the agent that you want to contact. Or, you can just go to biggerpockets.com/agentfinder and match with the market experts now.

Dave Meyer:
If you like this style of conversation where we’re talking about local market conditions and you find it helpful to learn how to think about analyzing a market, interview potential teammates or people who can help you with your investing, check out the other BiggerPockets podcast on the market. I am the host of that one and we have these types of conversations regularly and I actually know a lot of these stats that we were talking about today because I was doing research for another market-based analysis show that we’re going to be doing on the market in just the next couple of weeks here.

David Greene:
All right, Kim, Victor, thank you so much for being on the show. We’ve loved having you. Kim, can you tell people where they can find out more about you?

Kim Meredith-Hampton:
Sure. [email protected], and we’re in Tampa and Orlando. Happy to help.

Dave Meyer:
Are you coming to the BiggerPockets conference? Are you going to be in Orlando?

Kim Meredith-Hampton:
Yes, of course.

Dave Meyer:
Excellent. Great.

David Greene:
Victor?

Victor Steffen:
You can find me at victorsteffen.com or on the BiggerPockets agent finder tool and always happy to help.

David Greene:
And that’s V-I-C-T-O-R S-T-E-F-F-E-N.

Victor Steffen:
That’s right. Very easy to find.

David Greene:
Not like Stephen Curry. All right. Well, thanks again for being here. I’ve learned a ton about both of your markets. I also learned about the BEAF-strategy. First time that I’ve ever heard about that, and how to buy an apartment complex in a city and turn it into a short-term rental specialist.

Victor Steffen:
Yeah, we need one of them.

David Greene:
Yes, we all do. Good job on that, Kim.

Kim Meredith-Hampton:
Thanks.

David Greene:
This is David Green for Dave, my beefy co-host, Meyer.

Dave Meyer:
That might be the best one yet.

Bob Broeksmit, Mortgage Bankers Association president and CEO, joins ‘Closing Bell Overtime’ to discuss the state of the housing market, new mortgage fees, and the ongoing credit crunch.